The effect of palladium incorporation on the performance of Cu-ZnO(Al2O3) during the hydrogenation of carbon dioxide has been assessed. Temperature-programmed reduction profiles and X-ray photoelectron spectra of copper revealed that Pd enhances copper oxide reduction. Carbon dioxide conversion and methanol yield were found to increase on Pd-loaded catalysts. The importance of the palladium incorporated to the base Cu-ZnO(Al2O3) catalyst in determining the catalytic activity is discussed in terms of the relative ease with which hydrogen is dissociated on the Pd particles and then spilt over the Cu-ZnO phase of the base catalyst.